A Kentucky Mortgage Loan Officer specializing in FHA, VA, USDA, First Time Buyers and KHC. This website is not an government agency, and does not officially represent the HUD, VA, USDA. FHA, Fannie Mae or any other government agency. NMLS# 57916 Equal Housing Lender
Reducing your debt level is never a bad idea. If you’re trying to qualify for a higher mortgage amount, lowering your debt level gets you further than increasing your downpayment amount.
DO-use an experienced realtor; or lawyer in the event of a private sale
You consult a doctor about your health, you consult a mechanic about your car, you should consult a real estate professional about any home purchase. Using a professional, even in the event of a private sale, allows you to benefit from their experience as you navigate through the process of buying a home.
DO-put a financing condition on the Offer to Purchase
A pre-approval is an approval based on you the borrower and your current financial profile. The property you are buying now requires an approval, specifically the value versus the purchase price and the overall condition and location of the home. A financing condition allows you time to get the property approved and supporting financial documents accepted by the lender. If for some reason the financing is not proceeding, your initial deposit will be returned to you. Alternatively, if financing is approved, your initial deposit is credited towards the down payment you wish to make.
DO-start saving up your closing costs
In addition to having a down payment, the lender will want to confirm you have additional access to funds to cover the closing costs. This would include legal fees, property tax adjustments, title insurance and any other miscellaneous moving expenses.
DO-know your payout penalties
Ensure you are aware of the costs involved if you break your mortgage term early for any reason. Given the number of special low rate discount mortgages being offered these days, make sure to read and understand the fine print before you sign. These details should be disclosed to you initially and if they aren’t, ask the right questions.
DO- start getting your supporting documents together
This will make the process go faster when you find a property. Your favourite mortgage professional should be able to provide you with a list of required documentation at the time of the pre-approval.
DON’T-switch employers or positions without first speaking with the lender
Again, your pre-approval is based on your current employment details and if you make a change, your pre-approval status may be affected.
DON’T-incur more debt
Your pre-approval is based on balances owing at the time of application and if the amount owing increases, your maximum purchase price could be reduced. This includes “don’t pay for a year” scenarios.
DON’T-forgo a property inspection to save money
It may cost you more in the end. Your real estate professional should be able to provide a referral for you if required.
DON’T-overlook a property because it needs a little TLC
Most lenders offer a “purchase plus improvement” mortgage. This allows you to include the cost of the improvements in your total mortgage amount such as new paint or new flooring. There are some special conditions surrounding this type of product.
If you can’t get a pre-approval for any reason at this time, your mortgage professional should be able to provide you with a plan of action for future financing approval.